Hyperliquid Policy Center and Douro Labs Push for Rule 611 Repeal

The joint submission, filed August 17, contends that the "trade-through" rule—which forces trading centers to prioritize prices displayed on traditional exchanges—fails to account for automated market makers and continuous, off-hours onchain order books. By requiring execution based on the National Best Bid and Offer (NBBO), current regulations create friction for blockchain-based platforms that operate outside the traditional consolidated feed.

Modernizing Onchain Execution

The groups urged the SEC to shift toward a principles-based approach for best execution, emphasizing that investor protection should focus on the final cost to the user rather than rigid adherence to legacy quotation systems. Their proposal suggests that regulators recognize independent, transparent reference prices when standard NBBO data is unavailable, citing the Pyth Network as a functional model for aggregated, onchain price formation.

While the SEC considers whether to rescind Rule 611 and Rule 610(e), the proposal remains a point of contention. Critics of the repeal, including some market participants and Commissioner Mark Uyeda, have expressed concerns that removing the rule could undermine objective price protection and increase reliance on individual broker-routing systems. The SEC is currently reviewing the feedback, with no final timeline set for a commission vote on the potential regulatory shift.